After a year of regular price increases, Tesla has slashed prices on some models by up to 20%. If you follow the Texas-based automaker, we’ll give you a moment to pick up your jaw.
CEO Elon Musk has repeatedly stated that the electric-only company does not discount cars. But the move comes after a quarter in which deliveries fell short of expectations. It will also allow some Teslas to qualify for new federal EV tax credits for the first time.
The first major price cut in brand history came without a formal announcement. Tesla no longer operates a public relations department, doesn’t answer reporters’ questions, and announces price changes only by posting new prices to the order page on its website.
The New Prices
| Vehicle | Old price | New price | Discount |
| Model 3 | $46,990 | $43,990 | -$3K (-6%) |
| Model 3 Performance | $62,990 | $53,990 | -$9K (-14%) |
| Model Y | $65,990 | $52,990 | -$13K (-20%) |
| Model Y Performance | $69,990 | $56,990 | -$13K (-19%) |
| Model S | $104,990 | $94,990 | -$10K (-10%) |
| Model S Plaid | $135,990 | $114,990 | -$21K (-15%) |
| Model X | $120,990 | $109,990 | -$11K (-9%) |
| Model X Plaid | $138,990 | $119,990 | -$19K (-14%) |
Model Y Now Qualifies for Tax Rebate
The most impressive discount of the bunch is a 20% discount on the Model Y. But the move will save many buyers more than 20%.
Congress last summer passed new federal laws governing EV tax rebates. Changes to the law removed a cap on the number of vehicles from each manufacturer that could qualify for a $7,500 tax rebate. That might have made many Tesla buyers newly eligible to claim the discount. But price caps complicated the picture.
Related: How Do Electric Car Tax Credits Work?
Cars priced over $55,000 and SUVs priced over $80,000 were ineligible.
Tesla markets the Model Y as an SUV. But the IRS considers it a car for tax purposes.
Three-row versions were eligible for the tax rebate with the $80,000 price cap under a provision designed for vans. But 2-row versions, the IRS says, are sedans thanks mostly to their low ride height. That meant they fell under the $55,000 price cap.
Tesla’s new pricing gets the basic Model Y under the line. So all buyers will pay $13,000 less to Tesla, and many will also get a $7,500 tax rebate.
Income caps will still render some buyers ineligible. But some buyers could pay $20,500 less for a Model Y today than yesterday.
